Back to our topic – 7 Creative Ways to Start Your Independence.In this episode, we are going to tackle another important topic – Building a Business Plan – and yes, you need one, even without the investment behind your back. In case you didn’t read the first steps of building your own business, read more in our previous article.
2. Writing a business plan
A business plan is considered a foundation to any successful company, no matter the industry, size or budget. This step-by-step guide will help you with information on creating a business plan for organizations at any stage, highlighting its different phases and goals, complete with samples and expert advice.
A typical business plan should include the following indicators:
- Product/business goals and deadlines
- Monthly financials for the minimum of first two years
- Profit and loss statements and balance sheet for three to five years
Starting businesses, startups or new entrepreneurs, all can create business plans to use as a guide as their new company progresses. And it’s for the best! You’ll need it to keep up with your defined goals and timeline. Even larger organizations create (and update) their business plans to retain to their high-level goals, financials, and timelines.
So why do you need to write a business plan?
Your business plan should be structured, with well transparent outlines of your goals and finances. It may help you locate and persuade right investors, relieving you from financial responsibilities.
In your business plan, you can also determine a company’s viability and its profitability leaving investors with tangible plans to decide on. Investors usually rely on businesses with well evaluated state of feasibility before funding it. Some banks even support businesses with loans, usually requiring a business plan to back your intentions and financial profitability.
Let’s not forget the business plan has a functional value for you as well – it keeps you accountable for defined goals and stick to the timeline. Overall, it works as an effective growth strategy.
Strategic planning
A plan can be an invaluable tool for clarifying your business idea, identifying the amount of time, money, and resources you will need to get started, and understanding the scope of your business.
Evaluating ideas
Focusing on just a few ideas at a time will help you handle more complicated business ventures. Crafting a business plan can help you prioritise your concepts and narrow your choices.
Research
When you write a business plan, you need to research your ideal customer and your competitors. These insights will help you make strategic decisions.
Recruiting
Your business plan can help prospective employees (and investors) understand the mission of your firm and build confidence in the venture, even in early stages.
Partnerships
The strategy you choose to pursue with other companies should be joint to your business vision and your audience. This will help you determine whether your business is a suitable for the company you’re hoping to reach.
Competitions
To find a relevant competitor is a true skill. When starting your business, you should definitely make some research, even about the product or a service you want to sell. As mentioned in our previous article, you need to get to it as soon as possible, eliminating all possible obstacles. You can try to Google these competitor brands based on where your target audience is located.
How should a business plan look like?
A business plan can help investors feel more secure about exposure to your business, but it also helps you feel more comfortable about taking on the responsibility of running a business. A structured business plan can be sometimes a pain. For that reason, we prepared for you a stylised business plan template.
Business plan template – the template is supposed to act as a blueprint, to help you write your own plan quickly, with all important information investors might look for. This format has helped many entrepreneurs to compose their business plans for startup pitches, getting loans or business sales.
There are plenty of samples online, but we would love to highlight the ones from Wisebusinessplans, as here you can find different samples based on the type of business. Whether you plan to start a coffee shop or a think-tank.
So let’s dive in. Your business plan, whether you are going to use a template or not, should consist of the following information. Of course, the depth would depend on how much low-cost model we are talking about and what niche you’ve decided for. for how you’ll grow your business.
Company description
There should always be a descriptive overview of your company, including its business model and legal structure (depending on the country where you start your business). Make sure you get all the necessary information about taxes and legalities before starting, this should go without saying. Some businesses decide for foreign markets as their company’s headquarter for various reasons, but the tax rates shouldn’t be the main reason and it’s really not the best legal practice.
Market research
As mentioned in our previous article, always make your homework – research the market – not only potential customers but also competitors. Include demographics and charts, and decide whether your primary customer will be an end-customer or wholesale, or even another business.
Products and service
This one’s pretty self-explanatory – make sure you describe what you’re offering in the most expressive way possible. Also, don’t forget to include the reason why your product or service is unique on the market and people should buy it. Show the demand and include also what current supply is on the market – this can help you negotiate based on data.
Marketing strategy
Marketing is an inseparable part of a business plan. Some people say – good product doesn’t need ads. Well, sure, but communication should be there, how else people get to know about your brand? Propose a plan to spread the word about your business, how the communication strategy will reach your target audience, mention channels you are going to use, from word-of-mouth to automated email marketing, through social media and paid ads or even local news.
Logistics and operations plan
Another important part of your plan would be how this whole will function. Describe how are you going to store your products, if you need additional storage or a warehouse. Mention, if applicable, you have a third-party partner or a dropshipping supplier. If you need to accept manual payments, mention it here. In some cases, you might want to list here raw materials needed to produce your products, but don’t mention whole producing process – this part is solely for letting relevant people know what other logistic and operations are connected to the whole production.
Financial plan
The most important thing (and the least creative) is how you are going to make money. Let’s not forget, initial deposit is close to zero, so find a way to make some money you can later reinvest to advertising, new tools or better materials. Detail here your plan for at least two years in the future – but no worries, nobody’s going to take their money back if you won’t fulfill your plan for 100% – but you should at least aim for it! One humble hint: Make some reserve in your reserve. It means even if you count with hitting $10k in the first year, tell yourself that if it’s going to be 7, it should be fine. But also prepare yourself how it will look like if you hit only 5 and make this your starting goal. And if you plan to spend $3k on advertising and marketing tools, rather count with 4, because there might be some additional fees or better tools than when you first started researching. In our free template you can find balance sheet and cash flow projections. These should help you balance your expenses and revenue with visible net profit – which is one of the main indicators investors will be looking into.
Check out our free template at design.moxiedgtl.com and let us know if you need any help with either business plan or previous steps – finding the one true business idea.